Trump’s Japan trade deal puts Ford & GM at a competitive disadvantage, as they will pay 25% tariffs on Canadian & Mexican parts and 50% tariffs on steel and aluminum. Meanwhile, Americans will only pay 15% tariffs to buy cars built 100% in Japan using cheaper parts and materials.
— Peter Schiff (@PeterSchiff) July 26, 2025
Ford and GM face rising tariffs while Japanese cars gain price advantage under Trump’s trade deal
Trump’s recent trade agreement with Japan sets a 15% tariff on Japanese vehicles imported into the US. Meanwhile, American automakers such as Ford and GM pay 25% tariffs on vehicles built using parts from Canada and Mexico and face 50% tariffs on steel and aluminum sourced from those countries. This analysis comes from Peter Schiff, who has highlighted the competitive disadvantages created for US automakers by these tariff disparities.
This disparity puts Ford and GM at a significant cost disadvantage. A typical American vehicle assembled in Mexico or Canada now carries thousands of dollars more in tariffs compared to a Japanese-made car imported to the US.
Data from July 2025 shows Japanese automakers increasing their US market share, with Toyota at 15.4% and Honda at 11.9%, while GM and Ford have dropped to 13.2% and 11.3% respectively. Dealers report that Japanese imports often cost less on the lot, pressuring American brands to offer deeper discounts.
The growing tariff burden reshapes North American manufacturing economics. Japanese companies can ship directly to the US with lower import costs. Meanwhile, American automakers face shrinking margins and higher supplier costs. GM suppliers have already issued profit warnings tied to rising trade expenses.
Ford and GM executives warn their profits could decline by up to 25% this year if tariff structures remain unchanged. The deal was designed to counter China’s influence, but it has created new challenges for American automakers competing against cheaper Japanese imports.